Sina Technology News Beijing time on the evening of
November 1st, Uber (NYSE: UBER) today released financial results for the third
quarter of 2022 ended September 30. According to the financial report, Uber’s
third-quarter revenue was $8.343 billion, an increase of 72% compared with
$4.845 billion in the same period last year. Excluding the impact of exchange
rate changes, the year-on-year increase was 81%. Net loss attributable to Uber
was $1.206 billion, down 50% from a net loss of $2.424 billion a year earlier.
Third quarter results:
Gross Bookings was $29.1 billion, up 26% from $23.1
billion a year earlier. Excluding the impact of exchange rate changes, the
year-on-year increase was 32%. The order total of $29.1 billion was slightly
below Wall Street analysts' average estimate.
Among them, the total order value of online car-hailing
service (Mobility) was 13.7 billion US dollars, an increase of 38%
year-on-year. Excluding the impact of exchange rate changes, the year-on-year
increase was 45%. Delivery orders totaled $13.7 billion, up 7% year over year.
Excluding the impact of exchange rate changes, it was up 13% year-on-year. The
order total was below analysts' average estimate.
Revenue was $8.343 billion, up 72% from $4.845 billion in
the same period last year. Excluding the impact of exchange rate changes, the
year-on-year increase was 81%. That compared with Wall Street analysts' average
estimate of $8.1 billion.
By region, the U.S. and Canada market revenue was $5.000
billion, an increase of 89% year-over-year. Latin America revenue was $518
million, up 33% year over year. Revenue in Europe, Africa and the Middle East
was $1.878 billion, up 77% year-over-year. Asia Pacific revenue was $947
million, up 27% year over year.
Net loss attributable to Uber was $1.206 billion, down
50% from a net loss of $2.424 billion a year earlier.
Adjusted EBITDA (earnings before interest, taxes,
depreciation, and amortization) was $516 million, compared with $8 million a
year earlier and analysts' average estimate of $458.7 million.
Cash flow from operations was $432 million and free cash
flow was $358 million.
Unrestricted cash and cash equivalents were $4.9 billion
at the end of the third quarter.
In the third quarter, Uber had 124 million monthly active
consumers, up 14% from 109 million a year earlier. The number of trips was 1.95
billion, an increase of 19% year-on-year, and an average of about 21 million
per day.
Performance Outlook:
Uber expects total orders to reach $30 billion to $31
billion in the fourth quarter of 2022. Excluding the impact of exchange rate
changes, it would have increased by 23% to 27% year-on-year.
Adjusted EBITDA will be $600 million to $630 million.
Net profit halved, stock price plunged, Meta's future
uncertain
When the Metaverse was still hailed as an outlet by the
outside world, Meta, the "leader" company of the Metaverse, could no
longer carry it.
Recently, Meta announced its third-quarter operating
results. According to the financial report, Meta's revenue for the quarter was
US$27.714 billion, which was higher than the US$27.38 billion previously
predicted by analysts, but compared with the same period last year, it fell by
nearly 4%. Meta's net profit for the quarter was US$4.395 billion, a 52% drop
compared to the same period last year, and this is the fourth consecutive
quarter of Meta's net profit decline.
In terms of specific business segments, advertising revenue,
as Meta’s core revenue, generated $27.24 billion in revenue this quarter, down
3.8% year-on-year. Reality Labs, the metaverse business that Meta has high
hopes for, reported revenue of $285 million in the quarter, down nearly 49%
year-on-year, and its loss widened to $3.7 billion from $263 million in the
same period last year. Reality Labs has accumulated losses of more than 9
billion US dollars this year, and this number will continue to expand in the
future.
However, in the face of the company's continued losses in
the Metaverse project, Zuckerberg pointed out in a conference call with
investors that Meta will continue to increase its investment in the Metaverse
project in the future, including the development of augmented reality
technology. And neural interface technology, which has also caused
dissatisfaction among many investors.
In the secondary market, since Meta announced its
third-quarter earnings report, the stock price has fallen by 24%, missing the
$100 mark. Since the beginning of this year, Meta's stock price has fallen by
55%, and its market value has evaporated by more than 550 billion US dollars.
Inside the company, longtime Meta shareholder Altimeter Capital called on the
company to cut wage costs by at least 20% and limit Metaverse spending to $5
billion a year.
But in fact, for Meta, this thunderstorm may be just the
beginning, bigger and more difficult challenges are yet to come, and the night
ahead will become extremely long.
How will Meta make money in the future?
Zuckerberg has said that the metaverse business cannot
see benefits in the short term, and during this period, revenue from
traditional businesses needs to be continuously transfused to Reality Labs. But
the question is, as the traditional business of Meta, the advertising business
itself is a "mud Buddha crossing the river", so how can it be
transfused to Reality Labs?
First of all, as a "barometer of the economy",
advertising is closely related to the operation of the macro economy.
Currently, the regions supporting Meta's revenue mainly come from North America
and Europe. Taking the first three quarters of this year as an example, the
combined advertising revenue of the two regions accounted for about 68% of
Meta's total advertising revenue.
However, the economies of these two regions are now facing
the risk of recession. Taking the European region as an example, Zhongtai
Securities once pointed out that after the epidemic, the recovery speed and
degree of recovery of the European economy is not as good as that of the United
States, the European economic momentum is weak, and subsequent growth is weak.
Zhang Wei, the person in charge of an overseas
advertising business in China, told us that due to the economic downturn, many
advertisers are currently cutting their budgets. In the past, Meta was a
must-investment platform for customers, but now it has become the first
advertising channel for customers to compress. If the economies of these
regions cannot recover as soon as possible in the future, Meta customers will
continue to lose.
Secondly, the current limited advertising spending of
customers tends to shift from digital advertising to online video advertising,
but Meta's Reels short video service has not yet been able to drive the growth
of its core advertising business.
The reason is that its own traffic is insufficient.
Taking user usage time as an example, according to the Meta research document
"Creators x Reels State of the Union 2022", Instagram users spend a
total of 17.6 million hours watching Reels every day, which is still less than
the 197.8 million TIK TOK users spend on the platform every day. one-tenth of
an hour.
The worse problem is that Reels' shortcomings are
difficult to fill in the short term. In particular, YouTube and TIK TOK have
signed a large number of high-quality talents, and they have ensured the
sustainable growth of the talents' income from traffic sharing, advertising
revenue and other aspects. Reels may find it difficult to move its foundation.
The existence of this short board makes it possible for the quotation of Meta
advertisements to continue to fall.
Finally, Meta's previous "personalized
advertising" effect has been declining since Apple launched its privacy
policy. A former Meta client said that the ROI of advertising on Meta used to
be between 5-6, but now it is good to be able to do 1, which has also triggered
a large number of "fleeing" of Meta advertisers.
According to Meta CFO Dave Wehner, he also publicly
stated that after Apple launched the APP privacy function, Meta will lose 10
billion US dollars in advertising revenue every year.
It is worth noting that although Meta claims that the
company is conducting research and development on artificial intelligence to
improve advertising accuracy. But the question is, Meta has burned so much
money in the Metaverse project, does the company still have enough funds to
support the research and development of the advertising project?
In addition, back in 2020, Meta was boycotted by
advertisers for its poor handling of misinformation and hate speech on
Facebook, causing reputation damage and the aftermath of the incident. As the
capital market has paid more and more attention to the ESG (environmental,
social, and corporate governance) of enterprises in the past two years, many
advertisers are worried that this situation will still occur in the follow-up
Meta? This also makes many advertisers take a wait-and-see attitude towards
Meta's advertising.
However, in the context of the heavy pressure of Meta's
advertising business, many executives within the company, including COO Sheryl
Sandberg, David Fisher, and Rollin Iverson, have left. The new executive, Manny
Levine, is a complete advertising layman. Many investors are worried that if
Marnie Levine makes a decision error, I am afraid that Meta's advertising
business will decline more severely.
Unknown Metaverse
Under the continuous pressure of the advertising
business, Meta must find a sustainable profit method as soon as possible in the
Metaverse field in order to build investor confidence. But the reality is that
this path to profitability is difficult.
In fact, VR products, as the best hardware carrier for
linking the Metaverse, are also the base for the development of the Metaverse.
Although the current sales of Meta's headset products are indeed very high. For
example, in 2021, the global VR headset shipments will reach 10.95 million
units, and the share of Oculus, a subsidiary of Meta VR business, will reach as
high as 80%. In the Chinese market, according to data released by Magic Mirror
Market Intelligence, during the period from 2021.7 to 2022.6, Oculus sales were
133,400 units.
However, in view of the substantial price increase of Oculus
products, Meta’s previous pricing of Oculus had the meaning of losing money and
making a profit, which cannot explain why Reality Labs lost so much. But the
problem is that in the context of the current weak consumer electronics market
at home and abroad, the price increase of Oculus has also reduced its sales
from 2.4 million units in the second quarter of this year to 1 million units in
the third quarter, and its sales have almost been cut in half.
On the one hand, the declining sales will directly impact
Meta's content ecological layout in the Metaverse. Since the current VR
fitness, VR games, and VR film and television are still in their infancy, the
initial development cost is still relatively high, which urgently needs to
transfer this part of the cost through subsequent operations, so that
developers can achieve profitability. However, if sales continue to decline, it
also means that the bottleneck of Meta’s future headset users has already
appeared, which will inevitably discourage a large number of developers. The
lack of content has caused a backlash on sales.
On the other hand, as the cost of VR core components
continues to rise, the continuous decline in sales also means that there is no
right to speak in the supply chain, and it is even more difficult to reduce
costs. This seems to be another "dead loop".
The more critical issue is that the current free cash
flow of Meta has fallen from a cliff of $12.562 billion in Q4 2021 to $1.73
billion. Although Meta has taken salary cuts and job freezes to reduce costs,
this is not in line with the Metaverse project. Compared with the huge
investment, it is a drop in the bucket. Obviously, Meta has been unable to
follow the previous "low price for market" route.
When a clear product strategy has not yet been found on
the TOC side, Meta has aggressively expanded to the TOB side of the Metaverse.
Some time ago, Meta launched its first high-end VR headset, Meta Quest Pro,
which is priced at $1,499, or about 10,741 yuan.
Although Zuckerberg's statement, this VR product is
mainly positioned in the office scene. However, on the TOB side, it can neither
solve the pain points of enterprises, nor bring substantial cost reductions and
efficiency enhancements to enterprises, which naturally makes it difficult for
the sales of this product to cause too much splash.
In fact, not only is the future sales of VR headset
products full of uncertainty, but Meta's layout in other metaverses is also
constantly questioned by investors.
First, Horizon Worlds, Meta's metaverse social platform,
had only upper body figures when it launched last year. At this year's Connect
conference, the characters were equipped with "legs". However, due to
the relatively poor immersion brought about by the lack of technology, games,
social networking, and office heights have all been moved to Horizon Worlds,
resulting in the lack of core competitiveness of the products. This not only
caused complaints from users, but even Meta's own employees refused to use it.
According to a recent internal Meta document, Horizon
Worlds has less than 200,000 monthly active users. If you compare it with the millions
of shipments of the Oculus lineup, you can't see how unpopular this platform is
with users.
Secondly, as a blockchain-based permissioned payment
system proposed by Meta, Diem was reported in January this year that Meta was
selling its stablecoin project Diem, and the Federal Reserve member bank
Silvergate Capital would acquire Diem and its technical assets for $200
million.
But many central banks, finance ministers, lawmakers
around the world, and many privacy protection agencies around the world have
questioned Diem and listed a number of issues related to Diem, including money
laundering and financial stability. In the end, due to regulatory obstacles,
the founder of the Diem project, David Marcus, left Meta, and its partners also
withdrew, which also means that Meta’s attempt in the field of metaverse
currency was a complete failure. So in the future, how will Meta make efforts
to open up the currency scene in the metaverse?
Finally, back in October last year, former Meta employee
Frances Haugen also publicly accused Meta of "putting interests over
safety." She said Meta knew that its products were fueling hatred and
hurting children's mental health, but it was always on the lookout for profit.
And in May, Immersion, a haptic technology development
company, filed a lawsuit against Meta, accusing Meta of infringing its patents
by creating an industry-leading virtual reality headset. Obviously, the
continuous litigation of Meta also makes it difficult for the outside world to
have a strong sense of trust in it, which makes the real landing of Meta in the
Metaverse project even more distant.
Should the winds of the metaverse stop?
In fact, Meta, as the forerunner of the metaverse at home
and abroad, is by no means an isolated problem. In my country, one of the
earliest Metaverse companies in China, Yingchuang Technology, has been owed
wages. The longest time has been half a year. The average salary arrears
exceeds 100,000 yuan. Even the company's HR has also joined the salary collection
team.
The PICO acquired by Byte for 9 billion yuan also has
many shortcomings in the construction of the content ecology. For example,
according to VR gyro statistics, by 2021, among the global VR application
platforms, there will be a maximum of 6,212 applications on Steam, followed by
2,284 types of VivePort, and Pico is less than a fraction of them.
It should be pointed out that, although the future of any
business model from concept to large-scale commercialization is bright, the
road is tortuous. And the various shortcomings shown by Metaverse today are
also the performance of the industry "crossing the river by feeling the
stones".
We have reason to believe that the Metaverse will penetrate
into many industries and empower many industries in the future. For example,
with the help of the blockchain technology in the Metaverse, the whole process
of agricultural products from growth to transaction can be recorded and
presented, and every link of agricultural production in the real world can be
mapped, and the products can be traced.
Obviously, this allows consumers to have a clearer
understanding of the whole process of planting, production, processing, and
circulation, crack down on shoddy behavior in the agricultural product market,
protect the brand attributes of national geographical indication agricultural
products, and promote It is of great significance for my country's agricultural
product industry to develop in a healthy direction.
But I just don't know whether the existing Metaverse
companies can withstand the continuous losses, thunderstorms in performance,
and the constant questioning of investors? More importantly, how can companies
ensure sufficient limited cash flow? This may be a question that many Metaverse
companies must think about today.
Epilogue
The pressure on the advertising business is difficult to
ease, and Metaverse continues to find no suitable profit-making method. In
Meta, it's hard to see an inflection point in the company's performance. If the
risk of foreign exchange fluctuations is superimposed in the future and
inflation in various countries intensifies, it is estimated that Meta's
subsequent financial reports will be even more ugly.
For Zuckerberg, whether it is really necessary to adjust
his business strategy, after all, to survive in the present is the most
important thing for Meta.
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